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Do ERP Vendors Lie?
Sunday, April 14, 2013

A client who is having problems with functionality fit of the ERP package he has purchased has posed the question “Did the ERP vendor deliberately lie re the functionality of the software?” This is a common allegation against software vendors when it is discovered during the implementation process that the software does not have the functionality the client expected.

Lack of functionality leads to modifications and additional modules, which has been identified as one of the major issues in budget blowouts and delays in live running that plagues ERP projects.

An examination of the specification put together by the client and the responses from the software house reveals the flaws in the process of selecting the ERP software starting from identifying the need and matching up the need with the different ERP software packages available to meet that requirement seems to be.

The company looking for an ERP package went through the process of talking to the different areas of the business to determine what their needs were and these needs were documented into a specification that encompassed the entire organisations requirements. This seems to be the standard method of determining the requirements for most organisations!

The specifications were then sent to a number of different potential software houses so the company could determine which of the software packages they wanted to have demonstrated. The responses were interesting! In some cases the answers were a definitive yes or no but in other cases the answers were ambiguous and skewed to ensure the answers were what they thought the client wanted to hear rather than a clear response to the requirement.

The vendor did not outright lie (arguable) but answered in a way to show their package in the best light to secure the sale. The claims of fraudulent misrepresentation would ultimately be determined by a judge, if it went that far, but it is difficult to lay that label based on the vagueness of some of the requirement in the first place and the responses, equally vague, from the ERP software vendor.

There are some ethical issues that certainly can be levelled towards the ERP software vendor. The vendor responds to many requests from prospective customers for responses to ERP software specifications. It is fair to say that the wording of the requests would or should indicate to the vendor the competence and experience of the company making those requests and perhaps suggest that the prospective customer should seek some professional assistance.

This may result in the loss of the sale for the ERP vendor as professional assistance may well mean the responses would be put under more scrutiny and the vendor would risk losing the sale. It would mean, however, that the client would most likely end up with a system that they could concentrate on implementing rather than one that required additional software or modifications that eat up the project budget.

Due consideration should also be made re the approach made by the buying company in the first place! The company did not really understand what ERP was designed to do and had a rosy eyed view that ERP was going to fix all of their problems and that the ERP vendor was a company that looked after the interests of their clients. Some basic research on the internet would have dispelled that notion! There was no model that combined the company’s requirements so that any shortcomings could be identified in house so that there would be no need for modifications or additional software modules.

The need for some professional, independent, assistance could have saved the company a lot of money and downstream problems. This was not considered necessary as the CIO saw this as his field of expertise to his detriment later on. He was fired! Another career down the drain!

So in answer to the question “ Did the ERP Vendor Lie?” I don’t believe there was a lie but there were clearly issues of transparency in the responses that ultimately resulted in a sale of software and the downstream problems associated with implementing a package that was not a good fit.

The lesson is the client will always end up with the legacy of the decisions they make re software and this manifests itself in cost and time blow-outs and the implementing client joining the ranks of the 55-70% of disappointed ERP outcomes.